Where should one start? I know that I need to do my own research but I think that's mainly applicable on individual stocks. What index funds are good (15% ROI) for medium term (5 years)? I'm using Robinhood, can I buy index funds there? Is mutual fund same as index fund?
There is no index fund that has a forecast 15% ROI. That is completely unrealistic expectation.
Look up FSMEX. I also believe ESPO is another high growth option.
VFINX. Sleep well. You can't beat the market.
Given your mindset, just stay out of the game instead. Until you educate yourself further.
Index funds. A little reality check: the overall correlation of stock valuation is to profits. Profits map to GDP over the long term. GDP growth is basically population growth + productivity growth + inflation. 5% is a more likely scenario going forward.
Long ass post: I trade a lot and you need to ask yourself what you want. Big returns = big risk. Trading is all managing risk and also managing upside. Example, before I buy, I know the stock and company well. I trade fast moving tech stocks (Nflx is one of my favs). Okay, your timeframe. 2 weeks? 20 years? Retirement? Most people diversify over multiple classes via ETFs. Thats easy. Youre done. Go Bogle and spread over cash/bonds/equities and leave it forever. Easy. Trading different time frames, trading momentum, trading news, etc, all come into consideration. Is it opex, for example? Window dressing season? First thing I do is chart out the s and p. Levels, where are we, support/etc. Then I go to individual stocks. Where are they, are they beatdown, overbought (I use a McClellan Oscillator, for example, as a market breadth indicator). Sometimes I get into dogshit trades like GE because they get oversold. Blood in the streets then Ill invest. K so you pull the trigger. Second trade first. Trade psychology changes once your money is in it so you plan an exit before a dime is spent. I'd chart out risk reward. I have 100k, the s and p bounced hard, nflx is looking good, ill risk 2% with a stop. From here, manage the trade. If you stop out, who cares? I don't. You cannot care. Managing risk is 80% of this game. Losers average losers: do not buy more of a losing trade. Most people get killed by not cutting out fast enough. If it goes up, youre on house money. Move your stop up, thus managing the trade. Basic charting books can help with technical patterns. Anyway, the moral is, Ive been doing it for a while and you dont learn it over night. Put 10k in account, go to Edgar, read the company's reports, learn to read a balance sheet.
Any recommended links or books to eli5 or understand a balance sheet ?
Short answer: Buy VTI and forget about it until you retire. Long answer: Read books by John Bogle
r/wallstreetbets
Oooh risky suggestion!